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5. Calculating tax incidence Suppose that the U. S. government decides to charge beer producers a tax. Before the tax, 10 billion cases of beer were sold every year at a price of $4 per case. After the tax, 5 billion cases of beer are sold every year; consumers pay $6 per case, and producers receive $3 per case (after paying the tax). The amount of the tax on a case of beer is $ per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $ per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers. True False
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5. Calculating tax incidence Suppose that the U. S. government decides to charge beer producers a ta...
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